Market Report |

Market report OCTOBER

Vegetable oil price rises have continued and even intensified (in the case of lauric oils) during October. The main reasons behind these increases are:

  • -palm oil production problems, especially in Malaysia, which means that stocks are still low
  • -farmers reluctant to sell their products, mainly in the Black Sea area and Argentina
  • -relatively low degree of coverage by many buyers
  • -high energy prices support vegetable oil prices at historically high levels.

Despite the rapeseed issues, world production of the 4 main vegetable oils is likely to increase by around 7 Mts (million tonnes) in October/September 2021/22, according to Oil World.
The attached table shows the quotations of the main oils and other reference values and their variation in the last 3 weeks:

In the case of sunflower, the final sunflower seed crop will be higher than initially expected in the EU. Production will be the highest in the last 4 years. However, the increase in production is not yet reflected in international prices, as the pace of sales is very slow. Farmers are reluctant to sell sunflower seeds in the Black Sea. Their financial situation is good and farmers sell others. As a result, millers face a limited supply of raw material. Although production is good, current availability is low.
On the other hand, the high oleic sunflower oil market has shown tensions in the last month, with low offers from the main producing countries.  In addition, low premiums offered to farmers have led to lower than expected segregation, mainly in the Black Sea countries.
In the case of palm oil, production losses will remain high until the labour shortage is solved. According to Oil World, Malaysian production has remained at least 10% below potential in the last four months. Yields in 2020 will be the lowest in 20 years.  In 2022, the government’s target of facilitating the entry of 32,000 foreign workers, plus the expectation of better weather conditions should help improve yields.

In order to better understand the dynamics of these and other vegetable oils, we invite you to download and continue reading LIPSA’s market report below, where you will be able to learn first hand:

1.    1.Evolution of reference markets
2.    2.External
3.    3.Sunflower oil
4.    4.Rapeseed oil
5.    5.Palm oil
6.    6.Lauric oils (coconut and palm kernel)
7.    7.Soybean oils